Growth – moving your business from government to private contracts

What an idea?

I read two articles in “The Daily Record” publication this month. Here are two quotes:

But to grow these companies from small startups to economic engines, they will need something else: Commercial customers.
____ from Finding the key to the next stage, cover story on July 8, 2014

… the Columbia-based tech company {IntelliGenesis}, which had previously focused on federal contracts, created a plan to take on the private sector.
____from Paving a path to the private sector, story on cover July 11, 2014

WOW, maybe I’m being unfair here, but I do believe that funding start-ups for the main purpose of developing/fulfilling government contracts is foolhardy. Just as any small, successful business knows that you cannot depend on your one or two big clients forever, so, too, should the funding institutions be thinking the same way with their programs for start-ups.

Is this a revelation? Probably not. But I am always a bit dumbfounded when I read articles such as these. Government programs come and go. Most often depending on lowest bids, the whims of Congress, etc. And yes, I make a disclaimer here, I’ve never worked with government contracts. But just as small businesses know that one or two main clients cannot be a lifetime guarantee, so too is the government scenario.

Interestingly, as I was working on this post, I noticed that the Aberdeen Proving Grounds in Maryland is facing a possible shift of 4300 military and civilian employees. This is part of the proposed 2020 Force Structure Realignment. This is  on the tail of the Base Realignment and Closure of 2005, completed in 2011, when the area gained at APG and also with contractors that moved here to accommodate the needs of the build-out and the various government contracts. Of course, it’s now 2014!

Much of this reminds me of corporations in the 1950s thru 1980s that were moving folks every 2-3 years as standard practice, uprooting their families with each relocation. Most accepted it as the trade-off for a good job that would last their lifetime and the benefits of insurance, pensions, etc. We saw some of those results in the last two or three decades!

Being a bit of a gypsy myself, I never imagined myself staying in any one place more than 2-3 years. So I rarely got caught up in the conflict between ‘hating my job but having put so much time in for benefits that I couldn’t think about leaving.’

I personally think that’s the same game we play when trying to accommodate anything ‘government.’ At a whim, the powers-that-be can change their minds. VOILA! New game plan required. Here’s an article on the concerns behind the latest possible changes related to our area. A decrease in military could easily result in more empty buildings, fewer contracts. In our local economy, it would be more homes on the market, fewer jobs, and higher taxes for those that don’t (or can’t) move.

I wonder when this country will begin to appreciate that large and small businesses who create products and services that consumers want and need are the backbone of the country. They create jobs. They make profits. In turn, the employees can afford to purchase products and services, including rent, vehicles, clothing, education, etc. Profits allow a business to sustain itself and grow. The consumer-business relationship can be straight-forward. If the  consumer is unhappy with your product or service, the successful business will adapt accordingly. Governments and institutions move much more slowly and with a lot less concern for the business-consumer relationship.

Yes, I do understand that government – local/state/federal – are how we get roads built, etc. And we pay plenty of taxes to get that done.

My real frustration is that often small businesses are having to compete with government, often in a very lopsided playing field. Thus, are there real gains to a local economy over the long term? Subsidies, contracts, the politics of choosing one area over another for a military installation, special deals to attract the government agency to ‘our’ area are too often a ‘pig in a poke’ transaction.

Let’s start recognizing American business – large and small. For out of the thousands of businesses, whether no employees or thousands, will come tomorrow’s new invention, better service, and exciting products. Oh yes, I hear the outrage that from government funding of research, etc. comes the new ideas, products, services. All I’m saying is that beware the short term gain at the price of a long term stranglehold.

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